dfcu Bank has launched a new home financing facility carrying an annual interest rate of 16.9%, aimed at helping Ugandans purchase, construct, renovate or refinance residential property.
The facility allows eligible customers to borrow up to 85% of a property’s open market value, while offering a 60-day repayment holiday and financing for insurance premiums.
The bank says qualifying home loan applications can be confirmed within 48 hours, subject to its terms and conditions.
The new product comes as prospective homeowners continue to face a range of costs beyond the price of a property, including deposits, valuation charges, insurance and the burden of servicing a mortgage over several years.
Sebastian Murokozi, dfcu Bank’s Manager for Home Loans, said the facility is intended to help customers manage the wider financial obligations that come with acquiring property.
“Buying a home is not simply a question of whether a customer qualifies for a particular loan amount. There is the customer’s own contribution, the costs associated with completing the transaction and the monthly repayment that will sit alongside other financial obligations for a number of years. We want to help customers structure that commitment at a level they can sustain,” Murokozi said.
For customers buying completed residential property, the bank will finance up to 85% of the open market value, with repayment periods of up to 20 years.
Those building homes are required to contribute at least 30% of the construction cost.
Beyond home purchases and construction, the facility covers several property-related needs, including buying land, structural renovations, development of rental properties, mortgage refinancing and equity release.
The product is open to qualifying salaried employees, self-employed people, Ugandans living abroad with verifiable income and expatriates working in Uganda who hold valid work permits.
Existing homeowners can also use the facility to refinance mortgages held with other financial institutions by transferring the loans to dfcu Bank.
Through equity release, eligible property owners can borrow against property they already own.
The bank is also targeting residential property investors, with financing available for projects involving up to eight rental units on a single land title.
According to dfcu, the product is structured to reduce some of the immediate financial pressure associated with taking on a mortgage.
Customers can finance their insurance premiums through the facility instead of paying the full cost upfront. The 60-day repayment holiday also gives borrowers time before scheduled loan repayments begin.
The bank has entered partnerships with property developers and real estate companies to give customers access to selected residential properties and concessions on some transaction costs.
The partners include Build Net, HK Properties, Universal Multipurpose, Knightsbridge Avenue, Fakhruddin Properties, Royal Palms, Aesthetics, Comfort Homes and Pearl Marina.
Under some of the arrangements, customers can benefit from reduced transaction costs. Buyers of eligible properties through HK Properties, for example, can have legal and professional fees waived.
Murokozi said the financing model enables customers to spread the cost of acquiring a property rather than raising the entire purchase price at once.
“A home loan gives customers the ability to acquire the property they want without having to raise the full purchase price upfront. With financing of up to 85% of the property value and repayment periods of up to 20 years, customers have the flexibility to spread the cost over time and make the move into home ownership sooner,” he said.
dfcu Bank will also provide relationship management and financial advisory support to customers during the application and repayment period.
Borrowers who later experience difficulties meeting their repayment obligations are encouraged to contact the bank early so that possible restructuring options can be considered.
The bank, which has operated in Uganda since 1964, said the new facility builds on its longstanding role in financing individuals and businesses seeking to acquire assets, invest and build wealth.
The offer is targeted at first-time homeowners, existing property owners seeking additional financing and investors developing residential rental properties.
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